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Friday, June 10, 2011

Obama Needs A Little Help From His Friends

President Obama's stubborn determination to focus on deficit-reduction and what Robert Reich described in yesterday's post as supply-side solutions rather than on stimulating demand to create jobs is as baffling as it is infuriating. As Richard (RJ) Eskow argues, the Administration is capable of changing course, but not without public pressure: "For reasons we can't know, the Administration has embraced deficits over putting America back to work. It will continue down this path until its friends and its critics come together and demand that it stop."

When it comes to jobs, sometimes it seems as if the White House is from Mars and the middle class is from Venus. And Republicans act like they're from the Death Star, patrolling the economy in their Imperial Cruisers directing laser blasts at every job initiative they can find.

The resulting political paralysis has left millions of Americans trapped in geographical or demographic pockets of full-blown depression. Unlike Wall Street's America, theirs is a bleak economic landscape from which there seems to be no escape.

The Administration's mishandling of jobs has become a Rorschach test for those who understands that more needs to be done. Is the White House following a misguided political strategy, thinking people want lower deficits more than they want jobs? Has it been "captured" by the conservative thinking of ex-Republican Tim Geithner? Are the President and his advisors too reluctant to propose measures they know will fail in the Republican House because they want success stories?

Ask anyone these questions and the answers will tell you a lot about them, but very little about the White House (unless they have inside information, of course.) But the answers doesn't really matter. The President's staunchest supporters and his harshest liberal critics have the same work cut out for them.

St. Louis Blues

Sometimes I'd rather hammer nails into my skull than look at the latest job figures. But my toolbox is in the garage and it's raining, so here I am reading some new reports from the St. Louis Federal Reserve Bank. We already know about our ongoing and staggeringly high overall unemployment. We know about sky-high youth and minority joblessness and record levels of long-term un- and under-employment.

Now, thanks to the St. Louis Fed's data, we also know that we lost more than one million retail jobs between 2007 and 2009. That's the result of lost demand, which in turn comes from joblessness, fewer working hours for people with jobs, and a lot more money tied up in real estate than it's worth. The St. Louis numbers also show that the average number of hours worked declined by nearly an hour per week.

As the states shed jobs, we need between 300,000 and 400,000 new jobs each month to make up for unemployment and for young people and others entering the work force. The number of new private-sector jobs last month was 38,000. The government needs to put people back to work, and quickly.

Friendly Fire

A lot of people think the White House wants to spend more to create jobs, but doesn't want to propose anything that won't make it through John Boehner's House. That argument was undercut by the Administration's actions this week. Democrats in the Senate proposed an additional $$600 million in public works spending over a three year period. That's a very small number - our Citizens' Commission on Jobs and the Deficit recommended much more investment in jobs and growth, as did the EPI and others - but it's a move in the right direction.

Predictably, Republican Jim De Mint attacked the measure as "another failed job stimulus" idea - a line of attack that's only made possible because the White House chose to ask for less stimulus money in 2009 than was actually needed, rather than let Republicans shoot down the right number. That approach would have allowed Democrats to explain clearly why the economy's still stagnant.

It's also exactly the approach Harry Reid was using when he labeled the Republican House a "big black hole" from which nothing escapes except "their ideas on how to kill Medicare." At last! Finally, a Democratic strategy for underscoring the difference between Democrats and Republicans and the need to invest in job creation.

How did the White House respond? "White House says Senate Dems' jobs bill is too expensive," read the headline in The Hill. "...(T)he bill would authorize spending levels higher than those requested by the president's Budget,: the Administration wrote, "and the administration believes that the need for smart investments that help America win the future must be balanced with the need to control spending and reduce the deficit."

Aaaargggh.

Instead of explaining that we spent too little on stimulus rather than too much, the President and his advisors have allowed Jim DeMint's assertion to go unchallenged. Added DeMint, "We've already wasted hundreds of billions of tax dollars on a misguided stimulus that left us with record high unemployment, and we don't need to repeat the mistake."

Come together ... over jobs

Whatever his reasons, we now know that President isn't about to use his "bully pulpit" to contradict Republicans like DeMint. So if the White House won't step up to the plate, who will? Somebody needs to take action. To paraphrase Al Franken, why not you?

Public pressure has persuaded the White House to change course before. In the run-up to the President's State of the Union address, advanced reports said he planned to announce Social Security cuts. A lot of people raised the alarm, call-ins and other actions were organized, and in the end no cuts were announced.
Those of us who supported these actions got a lot of pushback from people who consider themselves the President's supporters. This kind of comment from Democratic Underground was typical. "Don't buy the Hype. Obama will not announce cuts to Social Security or Medicare. Once again this phantom has been blown up into a major sh*tstorm by those who oppose Obama on the Right and the Left. Once again it will fail to materialize. When the dust settles, Obama will have only reiterated what he has said before ... (there will be) no big scary cuts after all. Just another false alarm."

That's exactly the kind of friend the White House doesn't need. As the Wall Street Journal later reported, the Administration "considered offering specific benefit cuts and tax increases to shore up Social Security's finances, but ultimately decided to back off." The Journal added: "The decision to hold off was made as the White House came under pressure from Democrats and liberal interest groups who oppose any cuts to Social Security benefits."

That pressure didn't just save American seniors from needless hardship. It also prevented the White House from committing political suicide.

Later, additional grassroots activity forced the White House to hold the line on Medicare cuts. That allowed Democrats to draw a clear distinction between themselves and the GOP - exactly what they can't do right now on jobs, thanks to the White House - and the resulting backlash against Republicans led to an upset Democratic victory in New York's special Congressional election last month.

Now the Administration needs to be rescued by its friends again - this time on jobs. Citizen action is needed that will force the Administration to draw a clear distinction between its policies and those of the Republicans. The public needs to hear an honest and open debate about what the economy needs. It's not small-"d" democratic of the White House to deny them that debate. And it's not big "D" Democratic to allow the President's party to be labeled the party of joblessness.

We had eight years of the Republican approach to jobs, tax cuts, and deregulation. The result is a broken and devastated economy. For reasons we can't know, the Administration has embraced deficits over putting America back to work. It will continue down this path until its friends and its critics come together and demand that it stop. There will be more opportunities to call the White House, sign petitions, and send a message in other ways. These tactics work.

The White House's staunchest supporters and its fiercest progressive critics share a common goal. They both need to persuade the President and his advisors to make the case for creating jobs. Whether the Administration wants it or not, right now it needs a little help from its friends.